Solar companies take DECC back to the High Court over compensation claims

The three solar companies who issued DECC with a pre-action ‘letter before claim’ requesting £2.2 million in damages following ‘unlawful and unfair’ cuts to the feed-in tariff have been forced to turn to the High Court to settle its dispute.

The letter before claim issued by Prospect Law, the legal team behind the initial Supreme Court victory, claimed that the cuts enacted by Government directly caused substantial damage to its clients’ respective businesses. The letter requested that the department agree to pay £2.2 million in damages or face the prospect of yet another High Court battle. However, DECC responded to the group in August refuting all liability and refused to pay the claimed damages after insisting it was not responsible for losses.

Nick Keighley, Founding Director of Solarlec PV Solutions Ltd, one of the companies seeking damages, said: “We are hopeful for the future of the solar, with both the public in support of it and young people determined to be employed the sector, but companies such as ours must be in a healthy condition to create the solar future Britain wants.”

He added: “DECC had every opportunity to stop this issue reaching the courts.  All the Department needed to do was accept responsibility and help our businesses recover to deliver at the scale and pace required to meet its own policy objectives. Government simply needs to accept that the losses incurred as a result of its unlawful conduct were very real and caused substantial harm to our firms. One only has to look at the sharp drop in installation numbers to see the impact on consumer confidence.

“Our hope is that consumers will soon realise, once again, what a sound investment solar is. But it will be no thanks to Government. If it takes the High Court to impress on DECC their responsibility to the industry then so be it.”

It is expected that a number of other solar firms will be joining the claim before the end of October. The solar claimants hope that the number and scale of companies involved in the damages claim will heap more pressure on DECC to accept responsibility for losses incurred within the UK solar PV industry as a result of the unlawful cut to the feed-in tariff. 

A spokesperson from Prospect Law commented: “By casting aside the rules under which the solar industry operated, the Government caused major financial losses and materially harmed the confidence of both consumers and the industry. Solar is an industry which the public wants and believes in, but significant damage has been done to the sector. It’s now up to the High Court to call the Government to account for its unlawful actions and the damage which has been suffered by forcing DECC to issue compensation.”

The law firm maintains that the 2008 Energy Act and the feed-in tariff scheme provided those operating within the UK solar industry with a “legitimate expectation” under which both industry and the public could operate. However, the substantial cuts administered to the feed-in tariff effectively undermined long term investment in clean energy from both consumers and businesses alike. The claimants point to a drop in consumer confidence, reduction in orders, sales and profit margins as well as the abandonment of many substantial solar contracts as direct causes of the unlawful cuts announced in October last year.

Responding to the news, a DECC spokesperson said: “A claim has been brought in the High Court by Crystal Windows and Doors Limited, Solar Power PV Limited, and Solarlec PV Solutions Limited, for damages under s.8 of the Human Rights Act 1998, in relation to the DECC consultation on tariff rates for solar PV installations which was launched on 31 October last year.   DECC is currently considering this claim and will respond to it in due course.”

Do you agree with the solar companies' compensation claims? Will you consider joining the group's High Court damages claim? Let us know your thoughts by using the comments section below.